The Gold/RINF Ratio is a Positive Gold Stock “Internal”

The Gold/RINF ratio positively diverged HUI into today’s upside.

I am not going to pretend I had it all figured out. Indeed, I got burned on a partial hedge on my gold stock positions (that’s show biz). This is not a site or a service that likes to tout only some of its masterful moves (cough cough, China… cough, cough, which NFTRH has been fleshing out for several weeks), but also notes some of its failures.

There were enough negatives in the precious metals as to call into question whether the correction was ending (it is still not technically confirmed to be over), but there was one shining indication within the sector’s internals, as most recently updated in yesterday’s NFTRH 839. An indication that I am pretty sure the inflationist gold herds all but ignore. Gold’s relationship to the market’s inflationary signaling.

As a side note, the other significant positive has been silver’s bullish Cup & Handle, which is in Handle-breaking mode right now.

The Gold/RINF ratio is a measure of gold vs. a gauge of inflation expectations. As the disinflationary macro phase moves forward the gold price is back to out-performing these inflation signals. Yet the inflationist bugs were selling gold stocks down. The current positive divergence is not as profound as the one we noted in real time last February, preceding the big sector upturn into the current rally (and next bull market leg). But it sure is notable, and not being a major gold stock sector low (it’s just been a correction)l it probably would not have evolved to the degree of the February specimen before the rally resumes.

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